REMARKS BY V. I. LENIN ON THE BOOK BY
R. LUXEMBURG
"THE ACCUMULATION OF CAPITAL"
• Lenin Miscellany XXII

The two documents printed below consist of: 1) Lenin's remarks on R. Luxemburg's book "The Accumulation of Capital" and 2) a plan for an article which Lenin evidently intended to write in response to this book.

Both documents date to 1913, i.e., to the time of Lenin's stay in Poronin, near Cracow. This is attested to, among other things, by the first point of Lenin's plan for a response, which reads: "14 Years Ago. Populists versus Marxists. Legal Marxists and Social Democrats." Lenin here has in mind the discussion on the theory of markets that was conducted in Russia in the late 1890s.

"The Accumulation of Capital" appeared in January 1913. Thus Lenin worked through "The Accumulation of Capital" in the same year this book appeared. And already in the bibliographic appendix to the article "Karl Marx," written for the Granat Encyclopedic Dictionary at the beginning of the world war (autumn 1914), Lenin gave an assessment of R. Luxemburg's work as an *incorrect* interpretation of Marx's theory.

The remarks printed below were made by Lenin while reading "The Accumulation of Capital" on two separate small sheets of paper folded in half.

The sheets at our disposal do not cover all the text of the book. There are two large gaps in them; there are no remarks on pages 32-459 and 460-243 of R. Luxemburg's book. One can therefore assume that at least two sheets with Lenin's remarks have still not been found or have not been preserved at all. However, the remarks published here cover a number of the most important propositions in "The Accumulation of Capital" and provide invaluable material, sufficiently fully characterizing Lenin's attitude toward the entire conception of the cited work. In this lies the enormous *political and theoretical significance* of the published documents.

The theoretical and closely related political errors of R. Luxemburg are being used by contemporary enemies of the revolutionary proletariat in their struggle against the Leninist general line of our party and the Comintern. The "Left" social-fascists willingly resort to the old erroneous propositions of R. Luxemburg in their struggle against the Communist Party. Trotskyism, which is the vanguard of the counter-revolutionary bourgeoisie, attempts to smuggle in its counter-revolutionary positions under the guise of defending R. Luxemburg's errors. In his historic letter to the editorial board of "Proletarian Revolution," comrade Stalin timely drew the party's attention to the necessity of decisive rebuff and exposure of all the machinations of Trotskyist smugglers. Consistent Bolshevik criticism of the errors of the great revolutionary does not diminish her memory in any way; on the contrary, it serves the cause for which she gave her life.

The published documents represent enormous value for the correct Leninist evaluation and criticism of R. Luxemburg's entire conception. The erroneous theory of realization developed in "The Accumulation of Capital" is most intimately connected with the entire system of views of Luxemburgism, which represents one of the varieties of centrism, against which the Bolsheviks have always fought. R. Luxemburg's theory of accumulation is most closely connected with her errors on the peasant, national, and colonial questions, with an incorrect approach to imperialism. The direct conclusion from R. Luxemburg's theory of realization is the notorious theory of the automatic collapse of capitalism, by means of which the "Left" social-fascists attempt to treacherously divert the working class from the struggle for a revolutionary way out of the crisis.

Lenin's remarks and his plan for a response to R. Luxemburg's attempt to criticize Marx's theory have exceptional value. They are logically closely connected with the struggle which Lenin had to conduct on questions of the theory of realization in the late 1890s, acting both against the populist epigones of Sismondism and against Struvism, against the nascent direction of Tugan-Baranovism.

The ideologists of populism V. V. (V. Vorontsov), Nikolay-on (N. Danielson), and others were representatives of petty-bourgeois romantic criticism of capitalism. Encountering the contradictions of the capitalist mode of production, they were incapable of understanding their genuine role and significance; from the contradictions inherent in capitalism, they drew reactionary-utopian conclusions about the "impossibility" of capitalism. From this point of view, they approached the theory of reproduction and realization, proving the impossibility of realizing all the social product produced by capital. On the other hand, apologists for capitalism, who often at first concealed themselves behind the mask of "legal Marxism"—Struve, Tugan-Baranovskii, and others—in every way obscured the contradictions of the capitalist system, beautifying capitalist reality. If the economist-populists continued the line of petty-bourgeois criticism of capitalism, following Sismondi, then the representatives of Struvism and Tugan-Baranovism repeated the apologetic positions of Say, Mill, and other apostles of "harmonious" capitalism, partly attempting to ascribe their apologetic views to Marx, and partly demanding the introduction of necessary "corrections" to his theory. Lenin came forward with resolute and uncompromising struggle on *two fronts*—both against populist utopianism and against capitalism dressed in Marxist garb. He brilliantly demonstrated that the existence of contradictions in the course of the process of social reproduction under capitalism by no means signifies the impossibility of the latter, but rather means, on the contrary, the necessity of the historical replacement of capitalism by a new higher system—socialism. He showed how the development of capitalism through the deepening of contradictions inherent in it prepares the victory of the proletarian socialist revolution. He showed that this victory comes not spontaneously, not through the automatic collapse of capitalism as a result of the impossibility of realizing part of the social product, but only as a result of the cohesion and organization of conscious revolutionary forces of the proletariat, only as a result of the consistent revolutionary policy of the working class.

Lenin's remarks concerning R. Luxemburg's "The Accumulation of Capital" have the character of separate fragmentary notes made, evidently, directly while reading the book. In many cases, Lenin marks individual words and expressions from the text of the book which caught his attention. In other cases, the remarks have a more developed character. Even Lenin's briefest remarks usually very sharply and vividly characterize his attitude toward particular propositions in the book. Lenin's remarks together with his plan for an article provide the sole correct approach to the criticism of R. Luxemburg's theory of accumulation and have inestimable value for understanding the problem as a whole.

The significant majority of remarks are written in four columns on one sheet, written on both sides. The first column contains the beginning of remarks, ending with p. 54; on the second column are arranged remarks on pages 245-294; on the third column on the reverse of the sheet—remarks on pages 299-540, and on the fourth—all the rest to the end. On the second sheet are recorded only remarks on pages 459-468. The plan of the response is written in ink on a separate sheet; the reverse side of the sheet is occupied by another plan, written in pencil, evidently later. The remarks are written in blue and red pencil, with large abbreviations of individual words; the more detailed remarks and plan of response are written in ink.

For the convenience of the reader, we first give the complete text of Lenin's notes and the plan of the article; then in the appendix we reproduce the remarks a second time alongside those places in R. Luxemburg's book to which Lenin's remarks directly pertain. Chapters 28 and 29, to which there are also remarks, we do not reproduce due to their great length. Excerpts from the text of "The Accumulation of Capital" are given according to the fourth Russian edition of 1934, with the translation in some places clarified by us; words from the German original, used by Lenin in his remarks, are inserted into the corresponding places of the Russian translation. The numbers in Lenin's remarks indicate pages of the first German edition. Pages of the Russian edition of 1934 are noted on the margins to the right of the text.

A. Leont'ev.

---

REMARKS BY V. I. LENIN CONCERNING THE BOOK BY
R. LUXEMBURG "THE ACCUMULATION OF CAPITAL"

Rosa L[uxemburg]

5: "eine allgemeine Inkongruenz" (NB)
(crisis)

6: "von Krisen absehen" must NB

7: "längere Periode": crisis and boom are bal[anced out] 
"we mean precisely Durchschnitt"
always

11-12: Simple reproduction] in China and primitive]
communism]

12. With cap[italism] extended] reproduction] acquires]
"neue Charaktere".

17. "Planlosigkeit" — Crises

[17-18 Incorrect Fragestellung: individual. Not this Gegenstand
d[er] Untersuchung]

22-23. Quot[ation] from Ad[am] Sm[ith] copied from Developm[ent]
NB|| of capitalism] p. 11-12

25. Cap[ital] for one], inc[ome] for another]
(comp[are] liter[ally] 24 p. Developm[ent] of] cap[italism])

30: quot[ation] from Ad[am] Sm[ith] = p. 12 Developm[ent] of capitalism]
\9 5 and 50 same quotation|

31: Quot[ation] from Ad[am] Sm[ith] = p. 12 Developm[ent] of
capitalism] (!!!)

159: V. Il[yin] "did not notice"
the true probl[em] at Sism[ondi]

163. "Die Finte" Ricardian (forgot W — G — W):
not in that the essence|

468. S[ismondi] should reply to M[ac] C[ulloch]
Ha! |[respectable, — rogue . . .

243: russ[ian] m[arxists]: Kabluko[v], Manuilov!!!
| ha-ha! |

244: From legal m[arx]ists kein socialist (m[it] ein[em]
Ausn[ahme]) turned out] in rev[olution] on the s[ide] of proletari[at]

256, Anm[erkung] V. I[lyin] points out] relationsh[ip]
N[ikolay]-on and Sism[ondi]/

269 i. f. * Bulg[akov] follows slavishly!
Marx's schemes.

280. Anm[erkung] "im übrigen"
V. I[lyin] gives "viel richtigere" !!explan[ation] of external m[arket], than
Str[uve] and Bulg[akov] | uncl[ear] Orakelspruch! |

288. Quot[ation] from Ilyin about—

291. Gr[osser] Irrtum
Bulg[akov], T[ugan]-B[aranovskii] and Ilyin (NB)

291 i. i. "Nur der kap[italistische] Ausdruck"

291-2. What nonsense!!

292: allg[emeines] Gesetz in all
social] F[or]m[ations].

292 greater] use] of working] time on
Pr[oduction]m[eans]
than on Cons[umption]m[eans] (porridge).

294. With soc[ialism] Pr[o]d[uction]m[eans]: C[o]ns[umption]
m[eans] grow even faster (must).

III Sect[ion]

299. Beg[inning] Grundfalsch!

300. § 1 NB against R. Luxemburg]

301-2. Selection of quotes from M[arx] against R. L[uxemburg]

304. "unerfindlich" in M[arx] "für wen"

305: "schema contradicts M[arx]'s theory"!!
Fanatics etc. (beg[inning]) — Phraseology.

307 i. f. little example "doesn't match"**.

* in fine — means at the end of the page. Ed.
** A sharp expression is omitted here. Ed.

NB

310. in f. in M[arx] "dir[ekt] ausgeschl[ossen]" ]> grow[ing]
I over II.

311: "schlechtferdings] nicht zu erreichen"???

313. Schema excl[udes] sprunghafte Erweit[erung]!??
contradicts] Vol. III!!!!

314-5. Quot[ation] from III, 1, 224 = Developm[ent] of capitalism]
p. 18-19.

317. Quote] 
III, 
1, 
289 = [Developm[ent]] 
of 
capitalism]
from above.

320: against M[arx]. NB esp[ecially] i. f.
|320-321| NB "unlosbare Aufgabe".

322: "Ergänzen"!!
consumes] not capitalist] and not worker], non-capitalist] 
producers]

325: M[ore]v[alue] among non-capitalist] 
producers]
| = V.

327: not only capitalistically!!!

328. "Capitalist] m[ode] of pr[oduction]" limited] chiefly 
"for industry" Ha-ha!!

330. Impossibility] 
of capitalist] realization!
M[ore]v[alue]!!

332. Growth v through increase] of pop[ulation]
"contradicts] l[aws] of accum[ulation]"

332-3: T h a t  i s   c o m i c !

337: Root of error....
"undenkbar" NB|| 
correct instinct at Sismondi.

338: solut[ion] of pr[oblem] b e t w e e n   b o t h   extremes]
External m[arket] = non-capitalist]
social] environm[ent]!!!

340: Absatz for M[ore]v[alue] in non-capitalist] environm[ent]
nonsense

idem 343 (M[ore]prod[uct])

Amusing! "Chapter 28: Introduction of commodity e[conomy]".
At the beginning: "realization" of M[ore]v[alue] (p. 359, 2nd line
of chapter),—and story of violent introduction of opium
into China!!! Story very] and very] interesting, detailed: 
how many junks sunk in 1839 etc.!! Oh, scholarship!

NB

NB

[Ch. 29] Opium in China — quot[ation] from N[ikolay]-on about "bonanza
farms" etc. — Boers, tortoise[ing] of negroes in S[outh] Afr[ica]
etc. Noisily, variegated, empty of content.

392-3. [Unknown] M[arx] E[ngels] Falsch
—394. (Essence) Nonsense

396: "cond[itions] of capitalization] and realization] of M[ore]v[alue]v (?).
Not only M[ore]v[alue], but also c+v!!

403: "Genuss" among non-capitalist] layers
(iron] roads in Asia etc.).

404: "Critical] illust[ration] to M[arx]'s scheme"...
|nonsense: in another country the same capital] and the same workers] consume
c and v and t from that does not change. Development of capitalism
goes now breadth-wise (other countries] now depth-wise.| 

415-1 Death of Egypt very] good], but according to Rothstein etc.
Conclusion: "nur durch die Nilpferdpeitsche" (415). Precisely!
Whips herself R. L[uxemburg]! Not for the sake of "realization] of
M[ore]v[alue]", but for the sake of c o n v e n i e n c e of exploitation
("whips", free labor etc.) capital resettled] into wild countries. Higher percent! That's all.
Robbery of land (for nothing), loans at 12-13% (410) etc.
etc. — that's where the root is. (State] guarantees: 417) etc. etc.

445. i. f. ended] natürl[iche] selbstgeschaf[fene] Schranke
"even earlier"!!

!| 445. i. f. cap[italism]— "first econ[omic] f[orm] with
p r o p a g a n d i s t i c ] strength \\\
??? — and "first, which] c[annot]
exist] alone without other econ[omic] f[orms]".

---

AN UNSUCCESSFUL SUPPLEMENT TO MARX'S THEORY BY ROSA
LUXEMBURG.
(p. 322)*.

Something like:

I. 14 Years Ago. Pop[ulists] v[ersus] m[arxists].
Legal m[arxists] and s[ocial]d[emocrats].

II. Distortion in R. L[uxemburg].

III. Formulation of the theoretical Problem.

IV. Rosa Luxemburg's ["Supplements"] Criticism. Anticiticism.

V. " "Supplement". Failure.

V bis. Germ[an]
s[ocial] d[emocratic] press and "scandal-mongering".

VI. Dialectic and Eclecticism.

VII. Imp[erialism] and realiz[ation]
of M[ore]v[alue] 
(Rothstein etc.).

[Translation]

Example:

I. 14 years ago. Populists against Marxists.
Legal Marxists and Social Democrats.

II. Distortion in R. Luxemburg.

III. Formulation of the theoretical problem.

IV. ["Supplements"] by Rosa Luxemburg. Criticism. Anticiticism.

V. "Supplement" by Rosa Luxemburg. Failure.

V bis. German Social Democratic press and scandal-mongering.

VI. Dialectic and Eclecticism.

VII. Imperialism and realization of surplus-value
(Rothstein, etc.).

---

Appendix.

REMARKS BY V. I. LENIN WITH CORRESPONDING EXCERPTS FROM
R. LUXEMBURG'S BOOK
"THE ACCUMULATION OF CAPITAL".

... reproduction in capitalist society assumes a distinctive
form, different from all other historical forms of production.
First, each branch of production accomplishes within certain
limits an independent movement, which from time to time leads
to more or less prolonged interruptions in reproduction.
Second, the deviations of reproduction in individual branches
from social needs are periodically summed up i n general

5. "eine allgemeine
incongruency [eine allgemeine Inkongruenz] NB
(crisis)

discrepancy with these, which is followed by a general inter-
ruption in reproduction.

... it is very important to establish from the outset 8-9
that the periodic alternation of market conditions and crisis
indeed represent essential moments of reproduction, but not
the very problem of capitalist reproduction as such. The
periodic alternation of market conditions and crises represent
a specific form of motion in capitalist economy, but not
motion itself. In order to present in pure form the problem of
capitalist reproduction, we, on the contrary, must precisely
abstract from the periodic alternation of market conditions
and crises [von Krisen absehen]. However strange this may

6: "von Krisen ab-
sehen"** must NB

seem, it is nonetheless quite rational methodology; more-
over, from a scientific point of view, it is the sole acceptable
method of investigation.

... "if we take a longer period
[eine längere Periode], a whole cycle with alternating 7: "längere Periode"*:
market conditions, then high market conditions and crisis crisis and boom are balanc-
[ed out]
that is, the highest tension of reproduction with "we mean precisely
its decline and interruption, are balanced out, and Durchschnitt"**
as a result for the entire cycle we obtain a certain always
average magnitude of reproduction. This average magnitude
represents not only a theoretical, ideal magnitude, but also
a real, objective fact.

... if we henceforth speak of capitalist reproduction, [7.]
then we must always understand by that the result which
emerges as an average conclusion [so ist darunter stets jener
Durchschnitt zu verstehen] from the alternation of market
conditions within the cycle.

... Extended reproduction is not an invention
of capital. On the contrary, it has long been the rule for every
historical social form which manifests economic and cultural
progress. True, simple reproduction, that is, the constant
repetition of the production process on the same scale, is
possible, and we can observe it over enormous periods of
social development. Such are, for example, primitive
communist village communes, in which the growth of
population becomes possible not through gradual expansion
of production, but through periodic splitting off of
population growth and the founding of equally small and
self-sufficient branch communes. The small ancient craft
enterprises of India or China also furnish examples of
traditional repetition of production in the same forms and
on the same scale—repetition handed down from generation
to generation. But in all such cases simple reproduction
forms the basis and hallmark of general economic and
cultural stagnation. All significant advances of production
and monuments of culture, such as the enormous water
installations of the East, the Egyptian pyramids, the great
Roman roads, Greek art and science,

11-12: Simple
reproduction] in
China and primitiv[e]
communism]

the development of craft and of medieval cities, would be
impossible without extended reproduction, since only
gradual expansion of production beyond immediate needs
and constant growth of population and its needs form at
one and the same time the economic foundation and social
stimulus for decisive cultural advances. Exchange, and with
it the emergence of class society and its historical
development up to the capitalist form of economy, would
also be unthinkable without extended reproduction. But in
capitalist society, to extended reproduction are added some
new characteristic features [einige neue Charaktere].

12. With cap[italism]
extended] reproduc-
tion] acquires] neue Cha-
raktere*.

... on the one hand, the drive of individual
capitals to surplus-value, competition among them, as
well as the automatic action of capitalist exploitation
and capitalist competition care for the fact that different
commodities are produced—including means of production—
and that at the disposal of the capitalist there exists a
growing class of proletarianized workers; on the other hand,
the absence of plan in these connections [die Planlosigkeit
dieser Zusammenhänge] manifests itself in the fact that the
coordination of supply and demand is achieved in all areas
only through constant deviations from their point of
coincidence, through constant hourly price fluctuations and
periodic fluctuations of market conditions and crises.

17. "Planlosigkeit"
— Crises**

From the perspective of reproduction, the question is
posed differently: how is it possible that the supplying of
the market proceeding without any plan with means of
production and labor-force and immeasurable changeable

[17-18 Incorrect Fragestellung***.
individual. Not this Gegenstand
drerl Untersuchung]****

conditions of sale ensures for the individual capitalist the
corresponding quantities and types of means of production,
labor-force, and the possibility of sale—matching his
accumulation and consequently increasing in certain quan-
titative relations—and expanding quantities? Let us
examine this question more closely. Let the capitalist
produce according to the formula we know in the following
proportion:

40c + 10v + 10m,

where constant capital is four times greater than variable
capital, and the rate of exploitation equals 100%. The
quantity of commodity would then represent value of 60
units. Let us assume that the capitalist is able to capitalize
half of his surplus-value, and that he adds it to the old
capital according to its composition. The next production
period could be expressed in the following formula:

44c + 11v + 11m = 66.

Let us suppose that the capitalist will also in the future be
in a position to capitalize half of his surplus-value, and that
he can do this each year. In order for him to accomplish
this, it is not sufficient that he generally find means of
production, labor-force, and a market for sale—he must
find them in a specific progression, corresponding to the
progress of his accumulation."

... Here Smith becomes confused and immediately
after this declares:

"Although the aggregate value of the named yearly
income is distributed in this manner among the different
inhabitants of the country, forming their income, we must,
in this, just as in the rent of private estate, distinguish
gross rent from net rent."

"The gross rent of a private estate consists of what the
tenant pays; net rent—consists of what remains for the
landowner after deduction of expenses for management,
repair, etc., or what, without harm to his estate, he can
apply to his consumption fund and spend on table, family,
the adornment of rooms, on household goods, on personal
pleasures and entertainment. His actual wealth depends not
on his gross rent, but on his net rent."

"The gross income of all inhabitants of a large
country contains the entire yearly product of land and labor;
the net income—the part remaining

22-23. Quot[ation]
from Ad[am] Sm[ith]
copied from Developm[ent]
of capitalism]
NB (p. 11-12*

* See Lenin, Works, Vol. III, p. 25. Ed.

REMARKS OF V. I. LENIN ON R. LUXEMBURG'S BOOK

at their disposal, deducted from their gross income the
expenses of maintenance, first, of their fixed capital,
second, of their circulating capital; or that part which they,
without touching their capital, can apply to their
consumption fund or spend on their maintenance, comfort
and pleasures. Their actual wealth is likewise in proportion
not to gross, but to net income."

... These examples lead us to the following 23
conclusion: what for one is capital, 25. Cap[ital] for
for another is income, and vice versa. How one], inc[ome] for
another (compare liter[ally]
then, under the given circumstances, can the aggregate 24 p. Developm[ent] of
capital of society be constructed? Indeed, almost all cap[italism])
scientific economics before Marx arrived at the
conclusion that there is no such thing as aggregate social
capital. In Smith, just as in Ricardo, we find oscillations
and contradictions on this point.

... The apex of clarity achieved by him 26-27
in this regard is expressed in the following formulation:

"Although the entire yearly product of land and labor 30: Quot[ation] from Ad[am]
of any country is, in the final account, undoubtedly Sm[ith] = p. 12 Developm[ent]
intended for the consumption of its inhabitants and to of capitalism]*
furnish these latter with income, yet as soon as it is |23 and 50—same quotation/
separated from the land which produced it, or leaves the
hands of the productive workers, it naturally divides
itself into two parts. One of these parts—and often the
largest—is intended first of all for the restoration of
capital or for the renewal of the means of existence, raw
materials, and finished goods, taken from the capital;
the other part is intended to form income, either as
profit for the owner of this capital, or for someone else,
as his land rent.

The gross income of all inhabitants of a large
country contains the entire yearly product of land and
labor; the net income—the part remaining at their
disposal, deducted from their gross income the expenses
for maintenance, first, of their fixed capital, second, of
their circulating capital; or that part which they, without
touching their capital, can apply to their consumption
fund or spend on their maintenance, comfort and pleasures.
Their actual wealth is likewise in proportion not to gross,
but to net income."

... He notes the fundamental distinction 31: Quot[ation] from Ad[am]
between fixed and circulating capital from the social point Sm[ith] = p. 12 Developm[ent]
of view: "All expenditures for the maintenance of fixed of capitalism] (!!!)*
capital obviously belong to exclusion from the net income
of society. In this income there cannot be included as
component parts either the raw materials necessary for
keeping his useful machines in good condition,
industrial implements, buildings, etc., nor the product
of labor which is required for transforming these raw
materials into the proper form. The price of this labor,
of course, will constitute part of the aggregate net
income, since the workers engaged in this area, can apply
their wages to the fund intended for their immediate
consumption. But in other fields of labor, both the price
and the product enter this f o n d of consumption; its price
enters the f o n d of consumption of the worker, while his
product—enters the corresponding f o n d of other
persons, whose means of life, comfort and pleasures are
enhanced through the labor of these workers."

... By his arguments, Sismondi proved that he was
incapable of understanding the process of reproduction
as a whole. Quite apart from his unsuccessful attempt to
distinguish capital from income from the social point of
view, his theory of reproduction suffers from the
fundamental error which he borrowed from Ad. Smith—
namely, the notion that the entire yearly product goes
wholly to personal consumption, leaving no part of its
value for the renewal of the constant capital of society; or,
in other words, that accumulation consists only in the
transformation of capitalized surplus-value into

159: V. Il[yin] "did
not notice" the true
probl[em] at Sism[ondi]

additional variable capital. If, however, later critics of
Sismondi, such as, for example, the Russian Marxist Ilyin,
in pointing to this fundamental error in the analysis of
the value of the entire product, thought that the entire
theory of Sismondi's accumulation, as unfounded and
"nonsensical," could be dismissed with a smile
expressing the critic's superiority, they thereby only
proved that they themselves had completely failed to
notice the very problem which is actually at issue in
Sismondi. That with the fact of accounting for that
part of the value of the entire product which
corresponds to constant capital, the problem of
accumulation is far from resolved, was best proved
subsequently by Marx's own analysis, who was the first
to discover Smith's crude error. But even more vividly
this was proved by one fact in the fate of Sismondi's very
theory. With his conception Sismondi arrived at the
sharpest collision with the representatives and
vulgarizers of the classical school—with Ricardo, Say,
and Mac Culloch. Both sides here represented two
opposite points of view: Sismondi—the impossibility
of accumulation, Ricardo, Say, and Mac Culloch, on the
contrary—its unlimited possibilities. But, in relation to
Smith's error, both sides occupied the same position:
like Smith and his opponents, in studying reproduction,
paid no attention to constant capital, and no one in so
pretentious a manner transformed Smithian confusion
on the question of decomposing all products into v + m,
into such an unshakeable dogma, as precisely Say.

... In fact, the entire position of Mac Culloch
depends and falls with the assertion that exchange is
actually the exchange of commodities for commodities—
that is, that every commodity not only creates supply,
but also, for its part, creates demand. In connection with
this, the dispute takes the following form: Mac Culloch
declares "supply and demand are expressions which are
only correlative and can substitute for one another.
The supply of one kind of goods determines the demand
for another kind of goods. Thus, the demand for a given
mass of agricultural products arises when, in exchange
for it, there is offered a mass of industrial products,
the production of which cost as much as the production
of agricultural products; on the other hand, the actual
demand for a given mass of industrial products arises
when, in exchange for them, there is offered a mass
of agricultural products which caused such equivalent
expenses." The trick [Die Finte] of our Ricardian is
obvious: he wishes to set aside monetary circulation
and present matters as though commodities were bought
and paid for directly with commodities.

From the conditions of highly developed capitalist
production he suddenly transports us to times of
primitive exchange trade, which still flourishes in
present-day central Africa. The grain of truth in this
mystification consists in the fact that in simple commodity
circulation, money plays only the role of intermediary.
But it is precisely the intervention of this intermediary,
which in the circulation process T—D—T (commodity—
money—commodity)
[W—G—W
(Ware—Geld—Ware)]
divided in time and space both acts of exchange—
sale and purchase—and made them independent of each
other, which precisely conditions the fact that after any
sale there does not necessarily immediately follow a
purchase, and, secondly, that purchase and sale are not
necessarily connected with the same persons, and only
in exceptionally rare cases take place between the same
"personae dramatis." But precisely against this is what
Mac Culloch errs: he makes a common-sense-defying
assumption when he opposes each other industry and
agriculture as buyers and sellers at one and the same
time. The community of categories, which moreover are
depicted as entering into exchange in their entirety,
masks here the actual fragmentation of that social
division of labor, which entails countless individual
exchange acts, in which the coincidence of purchases
and sales of opposing commodities is a rare exception.
Mac Culloch's simplified understanding of commodity
exchange generally makes completely incomprehensible
the economic significance of money and its appearance
on the historical stage, since it directly transforms the
commodity into money and ascribes to it the property
of exchanging directly for other commodities."

163. "Die Finte"*
Ricardian (forgot
W—G—W)
not in that the essence|

132-3
... The question was posed thus: what is the fate
of capitalized surplus-value, that is, that surplus-value
which is expended not on personal consumption of
capitalists, but on the expansion of production? But
Mac Culloch in his answer at one time completely
leaves aside the production of surplus-value, and at
another time expends all surplus-value on the
production of luxury items. But who is the buyer of
the newly produced luxury items? According to Mac
Culloch's example, obviously, the capitalists (his farmers
and manufacturers), since besides them in his example
there are only workers. And from this it follows that
we are dealing with consumption of all surplus-value
for personal purposes of the capitalists, or, in other
words, with simple reproduction. Thus, Mac Culloch
answers the question about the capitalization of surplus-
value either by ignoring all surplus-value, or by
assuming, at the very moment when surplus-value
arises, instead of accumulation, simple reproduction.
The appearance that he spoke about expanded
reproduction, he, as before, in the examination of the
so-called "surplus," maintains again by a trick: he first
states an impossible case of capitalist production
without surplus-value, in order then to persuade the
reader that the emergence of surplus product is
expansion of production.

To deal with these twists of the Scottish scoundrel
turned out to be beyond Sismondi's strength. He,
who up to this point at every turn pressed his Mac
against the wall and proved to him the "obvious
absurdity" of his assertions, himself becomes
entangled at an important point in the dispute. He,
of course, should have answered his opponent quite
calmly: "Most respectable! I bow in respect to the
flexibility of your mind, but, you see, you, like an eel,
attempt to slip away from the very essence of the
question. I constantly ask: who will be the buyer of
the surplus product, if capitalists, instead of
squandering all their surplus-value, apply it for
purposes of accumulation, that is, for the expansion
of production? And you answer me: they will
accomplish this expansion of production by
increasing the manufacture of luxury items, which
they, of course, will themselves consume. But that's
a trick. For inasmuch as capitalists expend surplus-
value on luxury items, they consume it, and do not
accumulate it. But the question is precisely whether
accumulation is possible, not about luxury items
consumed by capitalists! So give me, if you are able to
do so, a direct answer to the question, or else go
where your tobacco grows and where your wine is
produced, and I couldn't care less!"

468, Sism[ondi]
should reply to M[ac]
C[ulloch]
Ha! |respectable,—
rogue . . .

... Of the two main representatives of the
populist tendency, one, Vorontsov, known in Russia
chiefly by his literary pseudonym V. V. (his initials),
was an original who was completely at sea in
political economy and to whom, as a theoretician,
one cannot take seriously at all; on the contrary,
the other, Nikolay-on (Danielson) was a man of
broad education, a thorough student of Marxism,
and moreover the author of the Russian translation
of Volume I of "Capital" and a personal friend of
Marx and Engels, with whom he maintained
animated correspondence (published in 1908, in the
Russian language). However, it was precisely Vorontsov
who exerted enormous influence on the opinion of
Russian intellectsia in the 1880s, and it was precisely
against him that Russian Marxism had, in the first
place, to come forward in struggle. On the question
interesting us, about the general possibilities of
capitalism's development, both of the named
representatives of skepticism in the 1890s were
opposed by an entire series of opponents—a new
generation of Marxists, armed with historical experience
and knowledge of Western Europe: alongside Georgi
Plekhanov there came forward prof. Kabluko[v], prof.
Manuilov, prof. Isaev, prof. Skvortsov, Vladimir
Ilyin, Peter Struve, Bulgakov, prof. Tugan-
Baranovskii and others. In what follows we will limit
ourselves mainly to three of the last authors,
since each of them gave a more or less completed
criticism of populist theory in the area of interest
to us here. This, in a certain sense brilliant tournament,
which held Russian socialist intelligentsia in tension
in the 1890s and concluded with undisputed triumph
of the Marxist school, opened to Marxism, as a
historical-economic theory, official access into Russian
science. "Legal" Marxism openly took root at that time
in the professorial chair, in journals, and in Russian
economic literature—with all the shadowy aspects of
this situation. Ten years later, when the possibilities
of the Development of Russian capitalism openly
showed to everyone their obverse, optimistic side in
the form of the revolutionary upswing of the
proletariat, from the mentioned constellation of
Marxist optimists, not a single one—with a single
exception alone—still remained in the camp of the
proletariat.

243: russ[ian] m[arxists]:
Kabluko[v], Manuilov!!!
| ha-ha! |

244: From legal m[arx]
ists kein socialist
(m[it] ein[em]
Ausn[ahme]) turned
out] in rev[olution] on
the s[ide] of proletari[at]*

... A striking similarity in the position of Russian
populists with Sismondi's conception was shown in
full detail by Vladi mir Ilyin in his article 196
"Characterization of Economic Romanticism".

... Bulgakov correctly conveys to us the
familiar Marx scheme of simple reproduction with
commentaries which do him credit. Then he brings
likewise the familiar Marx scheme of extended 206
reproduction, and therewith the sought proof is
given. "On the basis of the foregoing, it is not
difficult to determine in what accumulation will
consist. Subdivision I (of means of production)
must manufacture additional means of production
for the expansion of production in itself and in II,
while II will furnish an additional quantity of articles
of consumption, necessary for the increase of
variable capital in I and II. If we set aside monetary
intermediation, then the expansion of production
will reduce to the exchange of an additional quantity
of products of I, necessary for II, for an additional
quantity of products of II, necessary for I". Thus,
Bulgakov follows Marx's exposition exactly and
completely fails to notice that his thesis still remains
on paper. He thinks that with the help of these
mathematical formulas he has resolved the question
of accumulation. That one can imagine the
proportions which he copies from Marx—there is no
doubt about it. It is equally undoubted that if
expansion of production took place, it can be
expressed in these formulas. Not Bulgakov overlooks
the fundamental question: for whom is the
expansion of production occurring, the mechanism
of which he investigates? Once accumulation can be
represented on paper in mathematical proportions,
it has thus already taken place. Having declared the
question solved, he however, immediately, when
attempting to introduce monetary circulation into
the analysis, comes up against the question: where
do I and II obtain money for the purchase of
additional products? We have seen how the sore spot
in Marx's analysis—the genuine question about the
consumers for expanded production—constantly
reappears in the form of the incorrectly formulated
question about additional monetary sources.
Bulgakov here slavishly follows Marx's method of
investigation and adopts the same incorrect
formulation of the question, without noticing the
transition contained within it to another problem.

256. Anm[erkung]
V. I[lyin] points
out] relationship
N[ikolay]-on and Sism[ondi]/

269 i. f. Bulg[akov]
follows slavishly!
Marx's schemes.

... Bulgakov's principal argument against
the skeptics—from Sismondi down to Nikolay-on—
who thought that for the realization of capitalist
surplus-value it is necessary to resort to the aid of
external markets, consists in the fact that these
theoreticians, as is known, regarded all external
trade as a "bottomless pit," in which the excess of
capitalist production, finding no sale within the country,
vanishes without a trace. In contrast to this, Bulgakov
with triumph emphasizes that the external market is in
no case a "pit" and still less a "bottomless" one, that it
represents a double-edged sword and that export is
always connected with import, which more or less
balances the export. Consequently, that which is
imported through one border is exported through
another only in an altered use-value form. "For the
imported goods, which must constitute the equivalent of
exported articles of consumption, it is necessary again to
find a place within the bounds of the given market; there
is no such place, consequently, the appeal to the external
market entails only new difficulties.

* From legal Marxists not a single socialist (with a
single exception) turned out in the revolution on the side
of the proletariat. Ed.

V. I. LENIN'S REMARKS ON R. LUXEMBOURG'S BOOK

280. Note on the "in other respects." V. I[lyin] 
gives a "more correct" explanation of the external 
market than Struve and Bulgakov.
| (unclear) Oracular 
pronouncement!|

288. Citation from Ilyin.
NB
nia." In another place he says that the outcome found by Russian Populists for the realization 
of surplus value in the form of external markets 
is "far less felicitous than the outcome found 
by Malthus, Kirchmann, and Mr. V. V. himself (Vorontsov), as author of an article on militarism 
and capitalism."
... L. c., p. 236. Even more decisively 214
Ilyin formulates the same view: "The Romantic— footnote
that is how he calls the skeptic—says: 
capitalists cannot consume the surplus value 
and therefore must sell it abroad. The question 
is asked, are capitalists not already giving their 
products to foreigners for nothing or throwing 
them into the sea? They sell—which means they 
receive an equivalent: they import some products— 
which means they export others." "Economic Essays 
and Sketches," p. 26. In other respects, Ilyin gives a 
far more correct [Im übrigen gibt Iljin eine viel 
richtigere] explanation of the role of external trade 
in capitalist society than Struve and Bulgakov.
... We have already seen what decisive role 219—20 
the mentioned "basic law" of capitalism played in 
the dispute between Russian Marxists and skeptics. 
We know Bulgakov's opinion. In the same spirit 
another Marxist, already mentioned, V. Ilyin, 
speaks in his polemic with the Populists:
"It is known that the law of development of 
capital consists in the fact that constant capital 
increases faster than variable capital, i.e., an ever-
growing portion of newly formed capitals is directed 
to that department of social economy which 
manufactures means of production. Consequently, 
this department must grow faster than the 
department which manufactures articles of 
consumption, i.e., precisely that occurs which 
Sismondi declared 'impossible,' 'dangerous,' etc. 
Consequently, articles of personal consumption in 
the total mass of capitalist production occupy an 
ever-smaller and smaller place.
And this is completely consistent with the 
historical mission of capitalism and its specific 
social structure: the first consists precisely in the 
development of the productive forces of society 
(production for production); the second excludes 
their utilization by the mass of the population."
... the view that the production of articles of 
consumption does not depend on consumption is, of 
course, a vulgar-economic mirage of Tugan-
Baranovsky. But that is how matters stand with the 
fact by means of which he bases this obviously 
fallacious conclusion, i.e., with the fact that the 
growth of the subdivision of means of production 
proceeds faster than the growth of the subdivision 
of means of consumption. This fact is completely 
indisputable and moreover not only with respect to 
the old industrial countries, but also with respect 
to all countries where technical progress takes hold 
of production. On this fact rests Marx's fundamental 
law regarding the tendency of the rate of profit to 
fall. But, despite this or precisely because of this, 
Bulgakov, Ilyin, and Tugan-Baranovsky are greatly 
mistaken [gerade deshalb ist es ein grosser Irrtum], 
when they imagine that in this law they have 
uncovered the specific character of capitalist 
economy, for which production is an end in itself 
and human consumption merely an incidental 
circumstance.
The increase of constant capital at the expense 
of variable capital is merely the capitalist 
expression [nur der kapitalistische Ausdruck] of 
the general effects of rising labor productivity. 
The formula c > v, when translated from 
capitalist language into the language of the general 
process of labor, means nothing more than the 
following: the higher the productivity of human 
labor, the shorter the time during which a given 
quantity of means of production is transformed 
into finished product. This is a universal law 
[ein allgemeines Gesetz] of human labor; it holds 
good for all forms of society and will hold good in 
the future under socialist society as well. Expressed 
in the material form of use-value of the aggregate 
social product, this law must manifest itself in an 
ever-increasing application of social labor-time to 
the production of means of production [Produktions-
mittel] as compared with the production of means 
of consumption [Konsumtionsmittel]. In a 
socialistically organized and systematically directed 
social economy, this process should advance even 
faster than in modern capitalist society. First, the 
application of rational scientific technique on a 
broad basis will be possible in agriculture only when 
the barriers of private property in land have been 
removed. As a consequence of this there will occur 
a mighty revolution in this enormous branch of 
production. Ultimately it will lead to a colossal 
displacement of living labor by machine labor and 
will place on the agenda technical tasks of the 
largest caliber—tasks for which at present there are 
no adequate conditions. Second, the application of 
machines in the production process generally will 
be placed on a new economic basis. At present, the 
machine does not compete with living labor but 
only with the paid portion of living labor. The 
lower limit of machine application in capitalist 
production is determined by the costs of the labor 
power it displaces. This means that the capitalist 
thinks about the machine only when the costs of its 
production—with equal productive capacity—are 
less than the wages of the workers it displaces. 
From the standpoint of the social process of labor—
and only with this standpoint can socialist society 
reckon—the machine should compete not with the 
labor necessary for the maintenance of workers, 
but with the labor expended by them. This means 
that for a society in which the guiding principle is 
not profit-seeking but the saving of human labor, 
machine application would be considered 
economically advantageous already when its 
production costs less labor than the quantity of 
living labor it saves. We need not even speak of 
the fact that in many cases the machine can be 
applied where health and similar considerations in 
the interests of workers require it, even though its 
application does not achieve the minimal economy 
threshold mentioned above. In any case, the 
distance between the economic applicability of the 
machine in capitalist and in socialist society is at 
least equal to the difference between living labor 
and its paid portion, i.e., it can be measured by 
the entire capitalist surplus value. It follows from 
this that with the elimination of profit interests 
and the introduction of social organization of labor, 
the boundary for machine application immediately 
shifts by the entire magnitude of capitalist surplus 
value, and an enormous, boundless field opens to 
its triumphant advance. In this case, it would 
become obvious to the point of evidence that the 
capitalist mode of production, which purportedly 
causes the extreme development of technique, in 
fact creates, in the form of the profit interests 
underlying it, high social barriers to the 
development of technique, and that the 
elimination of these barriers will advance 
technical progress with such force that the 
technical marvels of capitalism will seem like 
children's toys compared to it.

If we translate this into the composition of the 
social product, then we must say that this 
technical revolution can only mean that the 
production of means of production [Produktions-
mittel] in socialist society—taking labor-time as 
the unit of measurement—must grow [anwachsen 
muss] incomparably faster than the production of 
means of consumption [Konsumtionsmittel]. Thus, 
the relationship between both subdivisions of 
social production—a relationship regarding which 
Russian Marxists imagined they had discovered in 
it the specific expression of capitalism's sin, 
neglect of human consumption needs—turns out, 
on the contrary, to be the exact expression of 
humanity's progressive conquest of nature by 
labor—an expression which will be most strikingly 
evident when human needs become the sole 
guiding standpoint in production. Thereby the 
only proof of Tugan-Baranovsky's "basic law" 
collapses as a mere qui pro quo; his entire 
construction, from which he derives his "new 
theory of crises" together with the theory of 
"disproportionality," reduces itself to its mere 
paper foundation—to a slavishly copied schema 
from Marx of expanded reproduction.

... In the first section we established that 227
Marx's schema of accumulation provides no answer 
to the question: for whom, actually, does the 
expanded reproduction occur? If we take the 
schema literally as it is developed at the end of 
the second volume, it appears that capitalist 
production exclusively realizes all its own surplus 
value and consumes the capitalized surplus value 
for its own needs. Marx confirms this by his 
analysis of the schema, in which he repeatedly 
attempts to carry out the circulation of this schema 
with monetary means alone, i.e., by the demand of 
capitalists and workers—an attempt which finally 
leads him to introduce the gold producer as a deus 
ex machina into the reproduction process.

... Here the following conditions for 
accumulation are established:
1) Surplus value subject to capitalization is born 
immediately in the natural form of capital (as 
additional means of production and additional 
means of subsistence for workers).
2) The expansion of capitalist production occurs 
exclusively by means of its own (capitalistically 
produced) means of production and means of 
subsistence.
3) The scale of expansion of production 
(accumulation) is determined in advance by the 
scale of the surplus value subject to capitalization. 
It cannot be larger because it is bound to the 
quantity of means of production and means of 
consumption representing the surplus product, but 
it cannot be smaller either, otherwise part of the 
surplus product in its natural form would find no 
application. Let such deviations upward and 
downward cause periodic fluctuations and crises, 
from which we must abstract here, but on the 
whole the surplus product subject to capitalization 
and actual accumulation must cover each other.
4) Since capitalist production itself absorbs its 
entire surplus product, no limit can be found for 
capital accumulation.

... Marx, after his own repeated and clear 300.
affirmations, undertakes to depict the process of 
accumulation of total capital in a society which 
consists only of capitalists and workers. Passages 
based on this exist in all volumes of Capital.

In Volume I, precisely in the chapter on 
"Transformation of Surplus Value into Capital," it 
is said:
"In order to examine the subject of our 
investigation in its pure form, independent of 
complicating circumstances, we must regard the 
whole of the trading world as one nation and 
presuppose that capitalist production has been 
everywhere established and has obtained possession 
of every branch of production" (p. 543, note 21a).

In Volume II this proposition occurs repeatedly. 
Thus in Chapter XVII, devoted to the circulation 
of surplus value, we read:
"But there are generally only two starting 
points—capitalist and worker. Third persons of 
every description must either receive money from 
these two classes for some service, or, insofar as 
they receive money without any service on their 
part, they are participants in surplus value in the 
form of rent, interest, etc.... Thus the class of 
capitalists remains the sole starting point of 
monetary circulation" (pp. 303—304).

Further, in the same chapter, specifically on 
monetary circulation under the condition of 
accumulation, it is said:
... "A difficulty arises when we presuppose the 
accumulation of money capital not as a private 
case but as a general phenomenon for the class of 
capitalists. On our presupposition—under 
universal and exclusive dominance of capitalist 
production—besides this class no other classes 
exist at all, except the class of workers" (pp. 318—
331).

The same thing occurs again in Chapter XX:
"For here there are only two classes: the 
working class, which has only its labor-power, 
and the class of capitalists, to which belongs the 
monopoly of ownership of the means of production, 
among which are also included money" (p. 392).

In Volume 3, in characterizing the process of 
capitalist production taken as a whole, Marx 
speaks with complete clarity:
"Let us conceive of society as consisting only 
of capitalists and wage laborers. Let us also 
disregard the fluctuations in prices, which prevent 
considerable portions of the total capital from 
being replaced according to their average 
proportions and which necessarily must cause a 
general stagnation from time to time, owing to the 
universal interdependence of various parts of the 
process of production, a feature which is especially 
developed by the credit system. Let us also leave 
aside the fictitious enterprises and speculative 
operations encouraged by the credit system. In this 
case, the crisis could be explained only by 
disproportionality of production in the various 
branches and the discrepancy between the 
consumption of the capitalists themselves and their 
accumulation. But under these circumstances the 
replacement of capitals invested in production 
depends chiefly on the extent of the consuming 
power of the unproductive classes, while the 
consuming power of the workers is limited on the 
one hand by the laws of wages, on the other hand 
by the fact that workers are only employed so long 
as they can be exploited at a profit for the 
capitalist class" (Part 2, p. 21).

This last citation pertains to the question of 
crises, which are not subject to our examination; 
but it clearly shows that Marx, "in accordance with 
the actual state of affairs," makes the movement 
of total capital dependent only on three categories 
of consumers: capitalists, workers, and 
"unproductive classes," i.e., strata adjoining the 
capitalist class ("king, priest, professor, whore, 
soldier")—strata with which he quite rightly deals 
in Volume II of Capital as representatives of 
derivative purchasing power and, consequently, 
participants in the consumption of surplus value or 
wages.

Finally, in Theorien über den Mehrwert, Vol. II, 
Part 2, p. 263, in the chapter "Accumulation of 
Capital and Crises," Marx formulates the 
assumptions under which he considers 
accumulation as follows:
"We need only examine those forms through 
which capital passes in its multifarious further 
development. The real relations, within the 
conditions of which the actual process of 
production takes place, are not developed. It was 
constantly presupposed that commodities are sold 
at their value. Competition between capitals is 
not examined, nor are credit operations and the 
actual structure of society, which by no means 
consists solely of the class of workers and 
industrial capitalists, so that the consumers do not 
coincide with the producers; the first category 
(the category of consumers whose income is partly 
not primary but secondary—derived from profit 
and wages) is considerably wider than the second 
category of producers, and therefore the manner 
of expending its income and the scale of the latter 
bring about very considerable modifications in the 
economy and especially in the process of circulation 
and reproduction of capital."

Consequently, here too, where Marx speaks 
already of "the actual structure of society," he 
directs attention solely to participants in the 
consumption of surplus value and wages, and 
consequently only to strata adjoining the basic 
capitalist categories of production.

Thus there can be no doubt whatever that 
Marx intended to depict the process of 
accumulation in a society consisting exclusively 
of capitalists and workers, under universal and 
exclusive dominance of the capitalist mode of 
production. But under these conditions his 
schema admits of no other interpretation than 
"production for the sake of production."

... The capitalized portion of surplus value, 304.
in accordance with Marx's proposal in Volume I of 
Capital, appears immediately in the form of 
additional means of production and additional 
means of subsistence for workers. Both serve for 
the ever-greater expansion of production in 
Subdivisions I and II. For whom [Für wen] does 
this progressive expansion of production occur—
on the basis of the presuppositions of Marx's 
schema this is impossible to determine [unerfindlich].

... Thus who realizes the constantly 231—2
increasing surplus value? The schema answers: 
the capitalists themselves, and only they. What do 
they do with their increasing surplus value? The 
schema answers: they use it for the ever-increasing 
expansion of their production. These capitalists 
are thus fanatics [Fanatiker] of production 
expansion for the sake of production expansion. 
They build new machines in order again to build 
new machines with them. What we arrive at in this 
way is not the accumulation of capital but the 
expanding production of means of production 
without any purpose, and only Tugan-Baranovsky's 
boldness and love of paradoxes is characteristic 
for accepting this endlessly rotating carousel, 
revolving in empty space, as a correct theoretical 
reflection of capitalist activity and as an actual 
conclusion from Marx's doctrine.

Apart from the sketch of the analysis of expanded 
reproduction, which breaks off at the very 
beginning and which we find in Volume II of 
Capital, Marx gave a very detailed and clear 
exposition of his general understanding of the 
characteristic course of capitalist accumulation 
throughout his work, especially in Volume III. 
And one need only reflect on this understanding 
to convince oneself easily of the insufficiency of 
the schema given at the end of Volume II.

If we verify the schema of expanded reproduction 
precisely from the standpoint of Marx's theory, we 
inevitably arrive at the conclusion that in many 
respects it contradicts this theory.

... But if we admit, in accordance with the 233
actual state of affairs, that from year to year there 
occurs only a faster growth of constant capital and 
a slower growth of variable capital, and that we 
have a rising rate of surplus value, then a 
discrepancy will appear between the material 
composition of the social product and the value 
composition of capital. The procedure in Marx's 
schema is not an unchanging ratio of constant to 
variable capital of 5:1, but a progressively 
increasing composition, e.g., for the second year 
6:1, for the third year 7:1, for the fourth year 8:1. 
Let us further assume that we have, in accordance 
with higher labor productivity, a continuously 
rising rate of surplus value—let us say that instead 
of a constant rate of surplus value of 100%, 
despite the relatively diminishing variable capital, 
we take each time the surplus value that was 
assumed for the corresponding years in Marx's 
schema. Finally, let us proceed from the fact that 
capitalization applies each time to half of the 
appropriated surplus value (excepting Subdivision 
II, which, according to Marx's assumption, in the 
first year capitalizes more than half, namely 184 out 
of 285 m). Then we obtain the following result:

First Year.
I. 5000 c + 1000 v + 1000 m = 7000 (means of
production)
II. 1430 c + 285 v + 285 m = 2000 (means of
consumption)

Second Year.
I. 5428 4/7 c + 1071 3/7 v + 1083 m = 7583
II. 1587 5/7 c + 311 2/7 v + 316 m = 2215.

Third Year.
I. 5903 c + 1139 v + 1173 m = 8215.
II. 1726 c + 331 v + 342 m = 2399.

Fourth Year.
I. 6424 c + 1205 v + 1271 m = 8900.
II. 1879 c + 350 v + 371 m = 2600.

If accumulation were to proceed in this manner, 
there would appear a deficit in means of 
production: in the second year of 16, in the third 
of 45, in the fourth of 88. Simultaneously there 
would be a surplus of means of consumption: in 
the second year of 16, in the third of 45, in the 
fourth of 88."

... "It is clear that the progressively increasing 238
organic composition of capital, i.e., faster growth 
of constant capital as compared with variable 
capital, must find its material expression in 
faster growth of the production of means of 
production (Subdivision I) as compared with the 
production of means of consumption (Subdivision 
II). But such deviations in the rate of accumulation 
of both subdivisions are directly excluded 
[direkt ausgeschlossen] by Marx's schema, which is 
based on the strictest uniformity of accumulation. 
Nothing in itself prevents us from assuming that 
society, with the progress of accumulation and its 
technical basis, continuously applies an increasing 
portion of capitalized surplus value to Subdivision 
of means of production instead of applying it to 
Subdivision of means of consumption. Since both 
subdivisions of production represent only branches 
of the same aggregate social production or, if you 
will, parts of a single enterprise of the collective 
capitalist, nothing can be objected against such an 
assumption of progressive transferral of part of 
accumulated surplus value—in accordance with 
technical requirements—from one subdivision to 
another; it corresponds to capital's actual practice. 
But this assumption is possible only insofar as we 
regard the surplus value intended for capitalization 
as a certain mass of value. However, in Marx's 
schema and its relationships, this portion of surplus 
value is bound to a definite material form, 
intended directly for capitalization. Thus the 
surplus value of Subdivision II appears in the form 
of means of consumption. And since this surplus 
value can be realized only by Subdivision I, the 
intended transferral of part of the capitalized 
surplus value from Subdivision II to Subdivision I 
breaks against, first, the material form of this 
surplus value, with which Subdivision I, 
obviously, can do nothing, and, second, the 
exchange relations between both subdivisions, 
which condition the circumstance that a 
transferral of part of the surplus value in products 
of II to Subdivision I must correspond to an equal 
value transferral of products of I to Subdivision II. 
Thus, within the framework of Marx's schema, it is 
impossible to achieve [schlechterdings nicht zu 
erreichen] faster growth of Subdivision I than 
growth of Subdivision II. Consequently, however 
we regard the technical change in the mode of 
production in the process of accumulation, it 
cannot be carried through without violating the 
basic relationships of Marx's schema.

... At one point in his Theories Marx clearly 
declares that he "is not here considering at all the 
case in which more capital has been accumulated 
than can be applied in production, and when, for 
example, it lies idle in the form of money with 
bankers. Hence the loaning of money abroad, etc." 
Marx points out that these phenomena belong to 
the chapter on competition. But it is important to 
establish that his schema directly excludes the 
formation of such surplus capital.

Competition, however widely we understand this 
concept, obviously cannot create any possibilities, 
and consequently no capital, which have not been 
obtained from the process of reproduction. The 
schema in this way excludes leap-like expansion 
[die sprunghafte Erweiterung] of production. It 
permits only continuous expansion, which keeps 
pace with the formation of surplus value and rests 
on the identity of realization and capitalization of 
surplus value."

... Finally the schema contradicts the 238—9
understanding of the capitalist process taken as a 
whole and its course as it was characterized by 
Marx in Volume III of Capital. The fundamental 
thought of this understanding consists in the 
immanent contradiction between the productive 
force's capacity for boundless expansion and the 
limited capacity for expansion of social 
consumption under capitalist relations of 
distribution. In Chapter 15, devoted to "the 
development of the internal contradictions of the 
law" (of falling rate of profit), Marx gives the 
following detailed picture:

"Given the necessary means of production, i.e., 
an adequate accumulation of capital, the creation 
of surplus value at a given rate of surplus value, 
and thus at a given degree of exploitation of labor, 
finds its limit only in the laboring population, 
while at a given laboring population it finds its 
limit only in the degree of exploitation of labor. 
And the capitalist process of production essentially 
consists in the production of surplus value, 
represented by the surplus product, or that portion 
of produced commodities in which unpaid labor is 
embodied. This must never be forgotten, that the 
production of this surplus value—and the 
subsequent conversion of a part of it into capital, 
or accumulation, constitutes an integral part of 
this production of surplus value—constitutes the 
immediate aim and the determining motive of 
capitalist production. Therefore it can never be 
represented as something it is not, namely, as 
production whose immediate aim is consumption or 
the manufacture of articles of consumption for the 
capitalists (and of course, still less for the 
workers. R. L.). That would be to forget its 
specific character, which manifests itself in all the 
internal relations of this production. The 
extraction of this surplus value forms the direct 
process of production, for which, as we have said, 
there are no limits other than those indicated 
above. As soon as the quantity of surplus labor 
that can be extracted is embodied in commodities, 
surplus value is produced, but by this production 
of surplus value only the first act of the capitalist 
process of production—the direct process of 
production—is concluded. Capital has sucked up 
such-and-such an amount of unpaid labor. With 
the development of the process, which is expressed 
in the fall of the rate of profit, the mass of surplus 
value so produced reaches enormous dimensions. 
Now the second act of the process begins. The 
entire mass of commodities, the entire product, 
both that part containing constant and variable 
capital and the part representing surplus value, 
must be sold. If this does not occur, or if it occurs 
only partially, or if the commodity is sold only at 
prices below the prices of production, then 
although labor was exploited, this exploitation is 
not realized as such for the capitalist, and no 
realization of the extracted surplus value, or only 
partial realization of it, may take place, bound up 
with the loss of part or even all of the capital. The 
conditions of direct exploitation and the conditions 
of its realization are not identical. They do not 
coincide in space and time, nor conceptually. The 
former are limited only by the productive force of 
society, the latter by the proportionality of the 
various branches of production and the consuming 
power of society. But this latter is determined not 
by the absolute productive force and not by the 
absolute consuming capacity, but by the consuming 
power on the basis of antagonistic relations of 
distribution, which reduce the consumption of the 
vast mass of society to a minimum varying only 
within more or less narrow limits. It is further 
limited by the striving for accumulation, for the 
increase of capital, and for the production of 
surplus value on an expanding scale. Such is the 
law of capitalist production, dictated by the 
constant revolutions in the methods of production 
themselves, by the devaluation of existing capital, 
the constant upheavals accompanying such 
revolutions, by universal competitive struggle, by 
the necessity of perfecting production and 
expanding its scale for the sake of mere self-
preservation and under pain of ruin. Therefore the 
market must constantly expand, so that its 
interdependence and the conditions determining it 
assume ever more the character of a natural law 
independent of the producers, and escape ever more 
from their control. The internal contradiction seeks 
to resolve itself by expansion of the external field 
of production. But the more the productive force 
develops, the more does it come into conflict with 
the narrow basis on which consumption rests. On 
this contradictory basis, it is therefore not 
contradictory that the surplus of capital is coupled 
with a growing surplus of population, for although 
when surplus capital is combined with surplus 
population, the mass of surplus value produced 
would grow, yet the very contradiction between the 
conditions of the production of this surplus value 
and the conditions of its realization would also 
grow."

... Let us cite one more passage from Marx, 240—1
which clearly shows that Marx was completely 
foreign to Tugan-Baranovsky's idea of production 
for the sake of production: "Besides, as we have 
seen (Book II, Section III), there is a constant 
circulation between constant capital and variable 
capital (independently of the acceleration of 
accumulation), a circulation which is first 
independent of personal consumption in the sense 
that it never enters into it, but which in the final 
analysis is limited by personal consumption, 
because the production of constant capital is not 
carried on for its own sake, but only because 
more of it is consumed in those branches of 
production whose products enter into personal 
consumption.

... That Marx actually identified the 243
conditions for accumulation of total capital with 
the conditions for accumulation of individual 
capital, he himself clearly confirms in the 
following passage:

"The question must now be formulated thus: 
presupposing universal accumulation, i.e., 
presupposing that in all branches of production 
capital accumulates to some extent or other—and 
this is actually a condition of capitalist production, 
the driving motive of capitalists as such as well as 
of the person who forms a hoard, for money 
accumulation (this is also necessary for capitalist 
production to continue)—what are the conditions 
of this universal accumulation and in what does the 
latter express itself?"

And he answers: "Consequently, the conditions 
for the accumulation of capital are precisely the 
same as the conditions for its original production 
and reproduction in general. But these conditions 
consist in the fact that part of the money is 
expended on labor, while another part is expended 
on commodities (raw materials, machinery, etc.)." 
"Consequently, the accumulation of new capital 
can only take place under the conditions under 
which reproduction of already existing capital 
takes place."

In reality the real conditions in the accumulation 
of total social capital are quite different from those 
for individual capital and simple reproduction. 
The problem rests on the following question: how 
does social reproduction work out under the 
condition that an increasing portion of surplus 
value is not consumed by capitalists but expended 
on the expansion of production? The expenditure 
of the social product—we leave aside the 
replacement of constant capital—only on the 
consumption of workers and capitalists is here 
excluded in advance, and this circumstance is the 
most essential moment of the problem. But this 
also excludes the possibility of realizing the 
entire product by the workers and capitalists 
themselves. They are capable of realizing only the 
variable capital, the used-up portion of constant 
capital, and the consumed portion of surplus value; 
they can thus ensure only the conditions for 
renewal of production on the same scale. On the 
other hand, the portion of surplus value intended 
for capitalization cannot possibly be realized by 
the workers and capitalists themselves. 
Consequently, the realization of surplus value for 
the purposes of accumulation in a society 
consisting only of workers and capitalists is an 
insoluble task [eine unlosbare Aufgabe]."

Only the deepest analysis and precise schematic 
representation of the process of the entire social 
production given by Marx, precisely his brilliant 
working out of the problem of simple reproduction, 
alone made it possible to uncover the vital question 
of the problem of accumulation and the sore spot 
of previous attempts at its solution. The analysis 
of accumulation of total capital, which breaks off 
at the very beginning in Marx and over which, 
moreover, as mentioned, unfavorable polemic 
against Smith's analysis hung which was not 
directly conducive to solving the problem, did not 
directly provide any ready-made solution to the 
problem; on the contrary, it was encumbered by 
the assumption of the existence of exclusive 
dominance of the capitalist mode of production. 
But precisely the entire analysis of simple 
reproduction in Marx and the characterization of 
the entire capitalist process with its internal 
contradictions and their development (in Volume 
III of Capital) contain implicitly the solution of 
the problem of accumulation—a solution which 
accords with the remaining parts of Marx's 
doctrine, with historical experience and 
everyday capitalist practice—and thereby make it 
possible to supplement [zu erganzen] the 
investigation with what is lacking in the schema. 
Upon closer examination the schema of expanded 
reproduction itself reveals its insufficiency in all 
respects and points to circumstances which lie 
outside capitalist accumulation and production.

III

... The realization of surplus value is in fact 244—
the vital question of capitalist accumulation. If 
we, for simplicity's sake, entirely leave aside the 
consumption fund of capitalists, then the 
realization of surplus value as the first condition 
will require a circle of buyers outside capitalist 
society. We say buyers, not consumers, because in 
speaking of the realization of surplus value we are 
not saying anything in advance about its material 
form. What is decisive is that surplus value can be 
realized not by workers and not by capitalists, 
but only by social strata or societies which 
themselves do not produce capitalistically. In this 
context two different cases are conceivable. 
Capitalist production delivers articles of 
consumption in a quantity exceeding its own 
needs (the needs of workers and capitalists), and 
the buyers of these articles of consumption are 
noncapitalist strata and countries. Such, for 
example, is English cotton industry, which during 
the first two-thirds of the nineteenth century (and 
in part even now) supplied cotton cloth to the 
peasantry, urban petty bourgeoisie on the 
European continent, as well as to the peasantry of 
India, America, Africa, etc. Here we have to do 
with the consumption of noncapitalist strata and 
countries, which created the basis for the colossal 
development of the cotton industry in England."

... "This understanding, which rests on the 
self-sufficiency and isolation of capitalist 
production as we have seen, suffers shipwreck on 
the realization of surplus value [der Mehrwert]. 
If we admit that surplus value is realized outside 
capitalist production, then this already implies 
that its material form has no relation whatsoever 
to the needs of capitalist production itself. Its 
material form corresponds to the needs of those 
noncapitalist circles which make its realization 
possible. Therefore capitalist surplus value can 
appear either in the form of articles of 
consumption, such as cotton cloth, for example, or 
in the form of means of production, such as 
railway materials."

... "It is completely incomprehensible why all 327
necessary means of production and means of 
consumption must be produced only capitalistically. 
True, precisely this assumption forms the basis of 
Marx's schema of accumulation, but..."

# V. I. LENIN'S REMARKS ON R. LUXEMBURG'S BOOK

328. "Capitalist mode of production" is limited chiefly by "industry"—Ha-ha!!

330. The impossibility of capitalist realization of surplus-value!!

"it does not accord with either the everyday practice and history of capital, nor with the specific character of this mode of production."

... Generally, capitalist mode of production has hitherto been confined predominantly to the industry of countries in the temperate zone, whereas, for example, in the East and South it has made only comparatively insignificant progress.

... The preceding examples were meant only to clarify the fact that at least some of the surplus-value to be capitalized [der zu kapitalisierende Mehrwert] and the corresponding portion of the capitalist mass of products can in no way whatsoever be realized within capitalist circles and that they must necessarily seek purchasers outside these circles—in non-capitalist producing social strata and forms.

... In analyzing the accumulation of individual capital, Marx answers this question as follows: "But in order to make these elements actually function as capital, the capitalist class needs an additional quantity of labor. If the exploitation of already employed workers cannot be increased extensively or intensively, then obviously additional labor-forces must be brought into operation. But the very mechanism of capitalist production has also taken care of this: it reproduces the working-class as a class dependent on wages, the ordinary level of which suffices not only for its self-maintenance but also for its reproduction. These additional labor-forces of various ages are annually supplied to capital by the working-class itself, so that it only remains to combine them with the additional means of production already contained in the product of annual production, and the conversion of surplus-value into capital is complete." The increase of variable capital is reduced here exclusively and directly to the natural increase of the working-class already under the domination of capital, through reproduction.

This also corresponds precisely to the schema of expanded reproduction which, according to Marx's assumption, recognizes capitalists and workers as the sole social classes, and capitalist production as the sole and absolute mode of production. Under these presuppositions, the natural reproduction of the working-class is the only source of increase in the available labor-forces under the power of capital. This understanding, however, contradicts the laws governing the movement of accumulation. The natural reproduction of workers neither in time nor in quantity stands in any relation to the needs of accumulating capital. In particular, it is unable to keep pace, as Marx himself brilliantly demonstrated, with the needs of capital arising from its sudden expansion. Natural reproduction of the working-class, as the sole basis of capital's movement, would exclude the process of accumulation during periodic fluctuations between high and low conjuncture and during leaps in the expansion of the field of production and, as a consequence, would make accumulation itself impossible. The latter must not be limited either by the growth of variable capital or by the element of constant capital; consequently it must possess unlimited capacity to dispose over the influx of labor-power. According to Marx's analysis, this requirement finds its precise expression in the formation of the "industrial reserve army of workers." True, Marx's schema of expanded reproduction does not know of this reserve army and leaves no room for it. The industrial reserve army cannot be formed through the natural reproduction of capitalist wage-earning proletariat. It needs other social reservoirs from which labor-power would flow to it; these are workers who were not previously under the power of capital and are only drawn into the ranks of the proletariat as needed. These additional labor-forces capitalist production can continually draw only from non-capitalist strata and countries. In his analysis of the industrial reserve army (Capital, vol. I, chapter 23, p. 4), Marx takes into account only: 1) the displacement of older workers by machines, 2) the attraction to the cities of rural workers as a consequence of capitalist production's domination in agriculture, 3) workers discarded by industry with irregular occupations, and finally 4) as the lowest stratum of relative overpopulation—pauperism. All these categories represent in various forms elements cast overboard by capitalist production—wage-workers who in one form or another have been used and cast out. According to Marx, rural workers who continually migrate to the cities are also wage proletarians who already previously stood under the power of agricultural capital and have now only passed into subjection to industrial capital. Marx apparently had in mind here English conditions at a high stage of capitalist development. In this connection he does not examine the question of where this urban and rural proletariat constantly flows from, and does not take into account the most important source of this influx under the conditions of the European continent—the constant proletarianization of middle strata in city and countryside, the decline of peasant farming and artisanal small industry; he does not take into account, that is to say, precisely the constant transition of labor-forces from non-capitalist conditions to capitalist conditions as a product not of capitalist but of pre-capitalist modes of production in the progressive process of their destruction and decomposition. But this concerns not only the decomposition of European peasant farming and crafts, but also the decomposition of diverse primitive productive and social forms in non-European countries.

... The process of capital accumulation in all its relations of value and material relations—with its constant capital, variable capital, and surplus-value—is bound up with non-capitalist forms of production. The latter form the given historical environment for the process of capital accumulation. Capital accumulation is unthinkable [undenkbar] if one presupposes the exclusive and absolute domination of capitalist mode of production; moreover, it is in no respect thinkable without a non-capitalist environment.

True, Sismondi and his followers possessed a correct instinct [einen richtigen Instinkt] regarding the conditions for the existence of accumulation when they traced its difficulties solely to the realization of surplus-value.

Between the conditions of realization of surplus-value and the conditions for the expansion of constant and variable capital in their material form there is an essential difference. Capital cannot dispense with the means of production and labor-forces of the entire terrestrial globe: for unimpeded development of the process of its accumulation it needs the natural wealth and labor-forces of all zones of the earth. But inasmuch as the latter in the overwhelming majority of cases are *actually* under the domination of pre-capitalist modes of production—and the latter are the historical environment of capital accumulation—there follows from this an irresistible striving of capital to conquer the corresponding countries and societies. In essence, for capitalist production, for example, capitally-operated rubber plantations, already arranged in India, would be suitable; but the *actual* domination in these countries of non-capitalist social relations in these branches of production creates in capital a striving to subjugate these countries and societies to itself; and the primitive relations of the latter make possible such exclusively rapid and violent methods of accumulation as would be utterly unthinkable under purely capitalist social relations.

Matters stand differently with the realization of surplus-value. It is beforehand bound up with non-capitalist producers and consumers as such. Consequently, the existence of non-capitalist purchasers of surplus-value is a direct condition for the existence of capital and its accumulation, and hence the decisive question of the problem of capital accumulation.

Capitalist accumulation, as a social process, is in fact in all respects bound up with non-capitalist social strata and forms.

Thus the solution to the problem which has been disputed in political economy for almost a whole century lies between two extremes: between the petty-bourgeois skepticism of Sismondi, Kirchman, Vorontsov, and Nikolai—on, who held accumulation to be impossible, and the crude optimism of Ricardo, Say, Tugan-Baranovsky, for whom capitalism itself can infinitely fertilize itself and consequently—this is merely the logical conclusion—exist eternally. The solution to the problem in the spirit of Marx's teaching consists in a dialectical contradiction: capitalist accumulation for its movement needs non-capitalist social formations as its surrounding environment; it progresses in constant metabolism with these formations and can exist only so long as it finds this environment.

Proceeding from this, one can reexamine the concepts of internal and external trade, which play so enormous a role in the theoretical dispute over the problem of accumulation. Internal and external markets undoubtedly play an enormous and profoundly different role in the course of capitalist development, but not as concepts of political geography, but as concepts of social economy. From the standpoint of capitalist production, the internal market is the capitalist market—this production itself: both as purchaser of its own products and as source of its own elements of production. The external market for capital is the surrounding non-capitalist social environment which absorbs its products and supplies it with elements of production and labor-power. From this standpoint—the standpoint of economics—Germany and England in their mutual commodity exchange are for each other predominantly internal, capitalist markets, whereas the relations between German industry and German peasants as consumers and producers represent for German capital external market relations.

... For its existence and further development capitalism needs non-capitalist forms of production as its surrounding environment. But not all of these forms are suitable for it. It needs non-capitalist social strata as a market for its surplus-value [als Absatzmarkt für einen Mehrwert], as a source of its means of production, and as a reservoir of labor-forces for the system of wage-labor.

... Violence here is a direct consequence of the clash between capitalism and natural-economy formations which set limits to its accumulation. Without their means of production and labor-forces it can get along just as little as without their demand for its surplus product [nach seinem Mehrprodukt].

*Amusing note: "Chapter 28: Introduction of commodity economy." At the beginning: "realization" of surplus-value (p. 359, 2nd line of chapter)—and an account of the violent introduction of opium into China!!! The account is very, very interesting, detailed: how many junks were sunk 7. IX. 1839, etc.!! Oh, the erudition!!

[Chapter 29] Opium in China—quote from N.—on about "bonanza farms" etc.—Boers torturing Negroes in South Africa, etc. Noisy, motley, empty of content.

296–7. The general result of the struggle between capitalism and simple commodity economy is as follows: having put commodity economy in place of natural economy, capital itself takes the place of simple commodity economy. Consequently, if capitalism lives by non-capitalist formations, then to speak more precisely, it lives by the ruination of these formations, and if for accumulation it absolutely needs a non-capitalist environment, then it needs it as nutritive soil; at the expense of sucking out its juices accumulation takes place. From the historical standpoint, capital accumulation is a process of metabolism between capitalist and pre-capitalist modes of production. Without pre-capitalist modes of production accumulation cannot take place; accumulation itself, from this standpoint, consists in the corroding and assimilating of these modes of production. Hence capital accumulation without non-capitalist formations is just as impossible as the further existence of the latter alongside capitalist accumulation is impossible. Only in the constant progressive destruction of non-capitalist formations are the conditions given for capital accumulation.

Thus what Marx took as the presupposition of his schema of accumulation corresponds only to the objective historical tendency of the process of accumulation and its theoretical final result. The process of accumulation has the tendency to put everywhere in place of natural economy simple commodity economy, in place of the latter—capitalist economy: it strives to realize everywhere and in all branches the absolute domination of capitalist production as the sole and exclusive mode of production.

But here a deadlock begins. Once the final result is attained—which, however, is a theoretical construction—accumulation becomes impossible: the realization and capitalization of surplus-value turn into an insoluble problem. Marx's schema of expanded reproduction at the moment of its correspondence with reality signifies the outcome, the historical limit of the process of accumulation and, consequently, the end of capitalist production. The impossibility of accumulation means from the capitalist standpoint the impossibility of further development of productive forces and, consequently, the objective historical necessity of capitalism's doom. Hence follows the full contradictory movement of the last, imperialist phase of capital, as the concluding period of its historical path.

Thus Marx's schema of expanded reproduction does not correspond to the conditions of accumulation, so long as it progresses: it cannot occur in the presence of definite mutual relations and dependencies existing between the two major divisions of social production (between the division of means of production and the division of means of subsistence) as they are formulated in the schema. Accumulation is not only an internal relation between branches of capitalist economy: it is first and foremost a relation between capital and the non-capitalist environment; in this environment each of the two major branches of production can in part carry on the process of accumulation independently of the other, with the movements of both branches intersecting and absorbing each other at every step. The entangled relations resulting from this, the difference in the rate and direction of the course of accumulation in both divisions, their material relations and relations of value with non-capitalist forms of production do not lend themselves to precise schematic expression. Marx's schema of accumulation is only a theoretical expression for that moment when the domination of capital reaches its ultimate limit. In this sense it is the same kind of scientific fiction as his schema of simple reproduction, which gives the theoretical formulation of the starting-point of capitalist production. But between these two fictions lies the precise knowledge of capital accumulation and its laws.

These contradictions of the international system of loans are the best indication of how little the conditions of realization and the conditions for the capitalization of surplus-value [des Mehrwerts] coincide in time and space. The realization of surplus-value requires only universal expansion of commodity production, whereas its capitalization, on the contrary, requires the progressive displacement of simple commodity production by capitalist. As a consequence, realization and capitalization of surplus-value are squeezed into ever narrower bounds.

... Realized surplus-value which in England and Germany cannot be capitalized and lies unused there is invested in Argentina, Australia, the Cape, or Mesopotamia in railways, irrigation works, mines, etc. Machines, materials, etc. are supplied from the same country from which the capital is obtained with which they are purchased. But the same thing is done within the country under conditions of capitalist production: before receiving productive application, capital itself must buy the elements of its production and embody itself in them. True, the product is consumed here within the country, whereas in the first case consumption is transferred to foreign countries. But the aim of capitalist production is not the consumption of products but surplus-value and accumulation. Free capital within the country had no possibility of accumulating because there was no need for additional product. But abroad, where capitalist production had not yet developed, a new demand arose or was violently created in the midst of non-capitalist strata. It is precisely the circumstance that "consumption" [der "Genuss"] of the product is transferred to *others* that has decisive significance for capital, since the consumption of the capitalist country's working population—capitalists and workers—does not count in accumulation. "Consumption" [der "Genuss"] of products must in any case be realized by new consumers and paid for by them. For this they must have monetary means. These are supplied them partly by the trade that arises at the same time. Directly connected with railway construction and mining (in gold-mining etc.) is lively commerce. It gradually realizes the capital advanced for railway or mine construction together with surplus-value. The capital flowing thus abroad can seek a field of activity at its own risk as share capital; it can find application in industry or in transport, entering a foreign country through the mediation of the state concluding an external loan; in the first case, share enterprises, as bubble companies, can soon suffer collapse; in the second case, the credited state can in the end prove bankrupt, and capital in one way or another can sometimes partially disappear for its owners, but all this does not change the matter as a whole. In this way individual capitals often perish during crises in their own country as well.

The essence of the matter consists in this, that the accumulated capital of the old country finds in the new country a new possibility of producing and realizing surplus-value, i.e., of continuing accumulation. New countries embrace new large areas with natural-economy relations which are transformed into commodity-economy relations, or with commodity-economy relations which are displaced by capital. Railway construction and mining (particularly gold-mining), characteristic of the application of capital from old capitalist countries in young countries, possess the property of evoking in the midst of the natural-economy relations that previously dominated a lively commodity exchange; both these branches are characteristic in the history of economy as the beginning of rapid decomposition of old economic formations, social crises, and the emergence of modern relations, i.e., first of all commodity economy, and then capitalist production.

The role of external loans and the investment of capital in foreign railway and mining shares serve therefore as the best critical illustration to Marx's schema of accumulation. In these cases expanded reproduction of capital represents the capitalization of already previously realized surplus-value (insofar as foreign loans and foreign shares are not covered by petty-bourgeois and semi-proletarian savings). The moment, the circumstances, and the form of realization of capital flowing from old countries to new have nothing to do with the present field of accumulation. The very English capital which rushed to Argentina for railway construction could previously have been Indian opium realized in China. Further, English capital building railways in Argentina is capital of English origin not only in its pure form of value as monetary capital: its material form—iron, coal, machines, etc.—also comes from England, i.e., the use-form of surplus-value is already previously created in England in a form corresponding to the purposes of accumulation. Labor-power—the use-form of variable capital—here is for the most part foreign: capital of old countries subjugates indigenous labor-forces in new countries as a new object of exploitation. For simplicity of investigation, however, we can assume that the labor-forces are of the same origin as the capital. In fact, newly discovered gold-bearing mines, for example, provoke—especially at first—mass immigration from old capitalist countries, and workers from these countries work in them chiefly. We can consequently take the case where monetary capital, means of production, and labor-forces of the new country come from the old capitalist country, say from England. In England in such a case all the material presuppositions of accumulation were present: realized surplus-value in the form of monetary capital, surplus product in productive form, and finally reserves of workers. And yet accumulation in England could not occur: England and its former purchasers needed no railways and no expansion of industry. And only the rise of new areas with large districts of non-capitalist culture created for capital an expanded circle of consumers and made expanded reproduction possible for it, i.e., accumulation.

... "Between European loan and industrial capital there occurs, as we have seen, such a transaction: Egyptian orders for industrial capital of Europe are paid for by its loan capital, while the interest of one loan is covered at the expense of capital from another loan. This transaction, at surface examination, appears nonsensical; but from the standpoint of capital accumulation, at its base lies a very rational and "healthy" relation. If one abstracts from the masking intermediary links, it turns out that European capital was devouring Egyptian peasant economy: vast expanses of land, countless labor-forces, and a mass of labor products, which in the form of taxes were paid to the state, all this in the final analysis was transformed into European capital and underwent accumulation. It is clear that this operation, which reduced the normal course of many years of historical development to 2–3 decades, became possible only through the hippopotamus-hide whip [nur durch die Nilpferdpeitsche] and that it was precisely the primitive character of Egypt's social relations that created an incomparable operational basis for capital accumulation."

... The more violence capital displays when through militarism it destroys the existence of non-capitalist strata throughout the world and in its own country and worsens the conditions of existence of all laboring masses, the sooner does the history of modern capitalist accumulation on the world arena transform itself into an uninterrupted chain of political and social catastrophes and convulsions which, together with periodic economic catastrophes in the form of crises, make the continuation of accumulation impossible; the revolt of the international working-class against capitalist rule becomes a necessity even before it collides with its natural, self-created economic barriers [ihre natürliche selbstgeschaffene Schranke].

Capitalism is the first economic form possessing propagandistic power; it is the form which has the tendency to spread over the entire terrestrial globe and displace all other economic forms and which tolerates no other economic forms beside it. But capitalism—the first economic form which cannot exist without other economic forms as its environment and nutritive soil; the tendency of capitalism to transform itself into a world form of production is shattered by its immanent incapacity to encompass all world production.
